Saturday, October 1, 2011

Shining Sunlight on the Crony Capitalism of President Obama and Solar Energy Companies

On a recent appearance on Judge Napolitano’s show , Governor Palin stated that the failed solar panel company, Solyndra, was just the beginning of what she calls “crony capitalism on steroids”. She noted:

We’re going to see much revelation of other companies too that are receiving our tax dollars that we don’t have, that we’re borrowing from China and we’re printing out of thin air in order to fund some of these entities that have friends in the White House and on Wall Street. And we’re the ones in the end, the middle class, who are made to suffer. People are going to understand more and more the dangers of crony capitalism, and that is why so many of us are saying, “whatever it takes to retire this permanent political class that has embraced it. We’re going to do to it!”

As usual, Governor Palin was correct in predicting pervasive crony capitalism in Washington DC. On Friday, the Obama administration doled out $5 billion more dollars in energy loan guarantees. One of those loans went to the company, Exelon (emphasis added):

The deals announced Friday include a $1.5 billion loan guarantee to Florida-based NextEra Energy and other investors that bought a planned 550-megawatt solar farm on federal land in Southern California from First Solar, as well as $646 million to Illinois-based Exelon Corp. for a 230-megawatt solar plant near Los Angeles. Next Era Energy Resources and GE Energy Financial Services bought the Desert Sunlight project from First Solar, while Exelon bought the Antelope Valley project. First Solar will continue to build and operate both projects.

TheNew York Times reported earlier this year that Obama accepted more than$225,000 in contributions from Exelon executives while watering down an antinuclear bill he had introduced in the Senate. Exelon is the nation's largest provider of nuclear power.

Next Era Energy, who partnered with GE, received $1.5 billion dollars in loan guarantees, but that’s not the only time Next Era Energy and GE have teamed up. President Obama’s Council on Jobs and Competitiveness is headed by GE CEO, Jeff Imelt, while Next Era CEO, Lew Hay III, also served on this council. This becomes crony capitalism defined, as President Obama stated when he established this council, “[i]t's critical for us to have input from folks who are actually hiring, putting people to work, making payroll, making the products and services that make our economy so powerful”. Isn’t it funny that these companies’ input potentially played a role in steering loan guarantees to their companies? Governor Palin has recently highlighted the crony capitalism of GE, including the loans (emphasis mine):

This icon of American industry is a company full of good employees who make some good products (and is the parent company of a huge media outlet), but GE is also a large American corporation that pays virtually no corporate income taxes despite earning worldwide profits of $14.2 billion last year, $5.1 billion of it in the United States. In fact, they claimed a tax benefit of $3.2 billion, meaning they received more of our hard earned tax dollars than they contributed. How is that possible? It’s because not only do they shelter their money from taxes, but they also get many tax credits, loans, government grants, and other benefits from the federal government that our smaller businesses couldn’t even imagine being able to profit from.

Governor Palin’s career has been marked by fighting cronyism and corruption. As a member of the city council, she called out a fellow councilmember for trying to modify Wasilla’s garbage regulations in order to steer business to his garbage collection company. She blew the whistle on the head of the Alaska GOP, Randy Ruedrich, who was working with her as a commissioner with the Alaska Oil and Gas Conservation Commission, when he was doing party business on state time. This resulted in the largest ethics fine in state history. As Governor, she continued this consistent fight against crony capitalism and corruption. Her three major legislative victories focused on this fight. She signed into all major ethics reform that disallowed trading votes for campaign funds. Her major energy reforms were passed in a transparent manner that did not allow oil companies to write the legislation to disproportionately benefit them. This includes restructuring Alaska’s oil tax system after the previous administration had developed a plan that was good for Governor Murkowski’s cronies, but not for the people of Alaska. Her natural gas pipeline project allowed companies to submit proposals for public consumption before state government officials made decisions, preventing backroom dealing. In her interview with Judge Napolitano, she noted that Americans want to do “whatever it takes to retire the permanent political class that has embraced [crony capitalism]”. An easy way to do this is to elect the woman who already done this every step of the way.